Basmati Exports Increased 17% to 3.2 million tonnes in April-December

India's basmati rice exports increased by 17% in volume during the first three quarters of the current fiscal year, with exporters earning at least 20% more on average in overseas markets, where Iran, Saudi Arabia, and the United Arab Emirates purchased half of India's total shipments of the aromatic rice. 

In terms of value, however, the increase was 40% to $3.34 billion from $2.38 billion. Because of the depreciating rupee, the growth in Indian currency is even higher - 50.5 percent - at 26,591 crore versus 17,664 crore. In fact, basmati rice export realisation increased to $1,044 per tonne this fiscal year from $868 per tonne the previous year.

Prices did not rise from the average received ($1,057) from April to September, contrary to expectations, according to an official. Though traders and exporters paid record-high prices for basmati paddy this year, anticipating a significant increase, the official stated that it is a win-win situation for all stakeholders-farmers, exporters, and consumers.

Recalling the 2013-14 price spiral in basmati, an industry official predicted that exports would not rise as much in the next two months because contracts are being signed at an average of $1,100-1,200/tonne, though some are receiving premiums and selling at $1,350 for limited quantities.

In 2013-14, India exported 3.76 million tonnes of basmati worth $4.87 billion, a record high in terms of value, at an average price of $1,295 per tonne. "That was an exceptional year because Iran purchased nearly 1.5 million tonnes of basmati from India, while the traditional top buyer Saudi Arabia imported approximately 0.8 million tonnes," said an industry veteran who has been tracking basmati prices for the last two decades.

"The problems in Pakistan is redefining the basmati market in addition to India's demand and supply. We are in the twilight zone," as per S Chandrasekaran, a foreign trade policy expert and author of a book on Basmati GI. Prices normally fall as supplies increase, but in the case of basmati, paddy prices increased by 19% in October to Rs 3,322/quintal in Haryana and then topped Rs 4,000/quintal.